Delta Air Lines has lowered its profit outlook for 2024 as supply chain issues and higher industry costs take their toll.
The carrier lowered its pre-share profit prediction to $6-$7, compared with the previous target of more than $7 in 2021.
News of the airline’s lowered outlook saw the company’s shares drop more than 8 per cent, it’s biggest one-day drop since March 2022.
Despite the lowered outlook, Delta’s chief executive officer, Ed Bastian, said in a statement that 2023 was a great year for Delta.
“Our people and their commitment to deliver unmatched service excellence for our customers is at the foundation of Delta’s success,” Bastian said.
“We are thrilled to recognise their outstanding work with $1.4 billion in profit sharing payments next month.”
Aircraft maintenance costs and an industry-wide shortages of parts and labour have impacted aircraft deliveries, forcing carriers to fly older planes and hence drive up the costs of maintenance and repairs. Delta’s costs were up 23 per cent in 2023 and the company told investors that costs were expected to be up $350m in 2024 from a year ago, according to Reuters. However, the airline announced that it has ordered 20 A350-1000 aircraft as it looks to meet its needs for modern efficient widebodies. These aircraft are scheduled to begin in 2026.
In the December quarter of 2023, Delta saw an operating income of US$1.3b and the airline saw an operating income of $6.3b across the whole year.
